Life insurance, together with associated benefits such as disability cover and dread disease cover, is not a comfortable subject to discuss and is often referred to as a grudge purchase. However, these benefits are often the very foundation upon which a sound financial plan is built. Most of us are aware that we need either life, disability or dread disease cover or a combination thereof, but we often procrastinate until a devastating event occurs, but then it is sometimes too late to qualify for cover.
It is especially important to have life insurance if you have debt such as a home loan, are married or are planning to get married, have or are planning on starting a family or if you are a business owner. Generally, the younger and healthier you are when you apply for cover, the cheaper the cover will be. This type of cover is often cheaper for women because they have a longer life expectancy and tend to live a healthier lifestyle compared to men. Unfortunately for smokers, cover is almost always more expensive for them than non-smokers!
We cannot know when we will pass away or whether we will become disabled or be diagnosed with a dread disease. It could be today, tomorrow or 30 years from now, but no-one lives forever. No amount of money will ever be able to replace a parent or spouse but having the right cover in place can certainly ensure that you and your loved ones are placed in a better position to cope if and when disaster should strike.
When we meet with a new client at our practice, we first ascertain the client’s current financial position and then proceed to establish the client’s financial objectives.
Over the past few months (in three separate instances) we have assisted new clients to successfully claim against a disability or dread disease benefit covered by an existing insurance policy, but which the clients were unaware that they were entitled to a claim. Co-incidentally, the clients had all initially indicated that they believed they were wasting their money on these policies and were considering cancelling them. In all three instances they received generous pay-outs from the life assurance companies once the claims had been assessed and processed.
A policy with life, disability or dread disease cover should be viewed as an asset to be cherished. Most reputable life assurance companies pay in excess of 90% of all claims received with most rejections being as a result of non-disclosure of material facts during the application process. An experienced Certified Financial Planner® will not only be able to advise you as to the type of life, disability or dread disease cover or combination thereof that bests suits your personal circumstances, but will also be there to support you or your family with the necessary administration during the difficult time when you need to lodge a claim.
Rands and Sense is a monthly column, written by
Ross Marriner, a CERTIFIED FINANCIAL PLANNER® with PSG Wealth.
His Financial Planning Office number is 046 622 2891